The Importance of Data Analytics and Collection

app analytics

Collecting and leveraging high-quality information about your app, your users, or your clients has never been more important to your business's success. And knowing how to get the most out of your app analytics—at the right time—can have huge financial impacts. 

Gartner estimates the yearly cost of poor data as high as $12.8 million for the average organization, while IBM famously put the annual tally at $3.1 trillion in the US alone.

This article will discuss why data analytics is essential for successful app development and business growth. We’ll cover the importance of digital data and the collection of information for a business, as well as the reasons to use big data, regardless of organization size.

Why is data collection important for your business?

Before you can make the most of any data-driven insights to improve your business practices, development strategies, and revenue streams, it’s important to set up a successful data collection process.

Data quality matters, especially as technological evolution and proliferation enables decision-makers to use targeted advertising metrics, machine learning, and other AI-powered tools. As such, the importance of data collection tactics that emphasize quality has only come into sharper focus.

The types of data most businesses collect fall into one of four categories.

1. Attitudinal data

This category covers metrics related to customer satisfaction, how liked (or not) a product is in a marketplace, and what criteria factor into purchases. Attitudinal data is often acquired via more direct methods, such as a customer experience survey, a focus group, or even a one-on-one user interview.

2. Behavioral data

Behavioral data refers to transaction details like purchase history and individual product usage information. The latter can include intel on a wide variety of product-centric information, such as which features are popular within an app, overall time spent using an app or platform, and which actions customers complete the most. 

In general, the more granular and specific you can get with behavior data, the better off your resulting data analysis will turn out.

3. Engagement data

This category outlines how consumers react with marketing, sales, and support channels such as email, instant messages, social media posts, online ads, and so on. This data enables you to gauge how well your different campaigns resonate with your target audience and if your tactics or messaging needs to be adjusted.

Engagement data and resulting insights (especially when weighed against average industry or worldwide performance) are primarily fueled by external metrics gleaned from third-party providers like Google Analytics, Moz, Ahrefs, and more.

4. Personal data

This data group includes everything from email addresses, account data, and gender, to cookies, IP addresses, and device ID information. When collecting any data that falls under the umbrellas of personally or non-personally identifiable information, ensure you’re complying with regional data processing regulations such as GDPR, CCPA, and others.

If you’re unsure how to proceed, do your research beforehand or contact local government officials.

Importance of business analytics

The main reason why data analytics is important to any business is simple: it enables you to unlock untapped potential.

Regardless of what data you’re prioritizing at any given moment, the collection of information for a business or app entrepreneur must help move the needle forward in some way. Every byte of data must have a purpose. Whether you’re improving the user experience or refining an existing marketing strategy, robust data collection processes support overall business objectives.

With solid marketing data collection or in-app metrics, you can rely on verifiable facts about your product or service’s performance with prospects and customers. In addition, it allows app developers and other stakeholders to minimize assumptions or guesses about what’s working and not, both technically and from a branding perspective.

This augmented clarity lends itself to better, more informed decision-making, something that, on its own, underscores the value of business analytics perfectly. But it’s the doors you open with that knowledge that enables anyone entrenched in the Shopify ecosystem to appreciate the importance of data analytics. 

You might also like: 8 Growth Metrics Every App Developer Should Track.

Benefits of data analytics

Once the data collection is in place, solo app entrepreneurs and larger businesses alike can transform their informational yields into detailed, data-driven insights. This is accomplished through a data analytics framework.

How data analytics helps business growth

There are many ways app developers and organizations can use consumer and internal data to promote short- and long-term business growth. Here are five of the most common:

  • Validating and optimizing app development strategy through an understanding of your most-used features and product gaps, especially when stacked up against competitors
  • Improving the user experience by leveraging insights from reviews and conversations with customers, as well as API integration and other compatibility considerations
  • Strengthening your marketing and branding by examining engagement data and adjusting your multiplatform approach to reach your target audience where they are
  • Securing and adding to your data repository by taking advantage of data collection expansion and cybersecurity upgrade opportunities
  • Adding and increasing revenue streams through intel on underutilized purchasing tools or features, pricing and promotion satisfaction metrics, and insight into which products or features are selling more than others.

How you realize one or several of these positive impacts will depend on your development or business objectives and the associated timelines. And while data collection should be a continuous process that evolves over time to include new methodologies and sources, data analytics must always serve what your goals, needs, and wants are for both the present and the future.

Overall, the importance of data analysis shines brightest for entrepreneurs and organizations looking to scale their offering, both now and over the long haul. However, thinking you know what to do won’t get you there—grasping the solutions data analytics present to you can.

The widespread advantages of internal data

We’ve talked a lot about the benefits of data analytics and collection in business, but what about data produced internally? Are there inherent advantages to favoring internal data gathering and analysis in tandem with external information sources?

In short, internal data plays a significant role in successful data-driven planning and execution. This type of information is typically plentiful and readily available, enabling key team members to assess it and use subsequent revelations instantaneously. An example of this advantage in action is financial reporting, which helps stakeholders gauge profitability with real-time intel.

Another pro related to internal data is the clarity of the narrative it presents. Unlike some external data, often shaped based on third-party platforms or documentation, the performance of individuals and departments, as well as specific aspects of your application or website, can be best represented by internal data.

While the importance of data and information generated from inside your business is vital, a blend of internal and external resources will paint a complete picture of your current efforts.

You might also like: Your Shopify App Isn’t Getting Any Installs. Now What?.

Are you getting the most out of your data analytics and data collection?

As this blog post has outlined, the role of data in an organization cannot be understated. 

Starting with solid, purposeful data collection, your analytics framework should pull information from a variety of sources, both internal and external, to get the most precise possible picture of your app as well as your business. That level of knowledge will empower you to grow your capabilities, scale your operations, and increase your revenue long-term.

With a solid foundation in place, you can also grow both halves of this process over time to include new data sources, as well as enhanced collection and analysis methodologies. That said, the best data-driven decision-making is purposeful, leveraging fact-based insights to make the right call at the app development, marketing, sales, and management levels.

So, if you’re looking to take the next step and maximize your app’s effectiveness and satisfaction rate in the Shopify App Store, data analytics and collection will be a formidable ally in your journey to sustained success.

Grow your business with the Shopify Partner Program

Learn more